Oil and Gas in Southeast Asia
Thai-Malaysia Gas Pipeline
YOU DON'T GET WHAT YOU PAY FOR
Bangkok Post 15 March 2000
Thai electricity users are paying high prices to cover the cost of gas we do not receive. Something could be done about it, but this might be seen as an admission of another example of typical government bungling.
The price of electricity has been rising dramatically in line with the increased cost of fuels such as oil and natural gas. Since nearly half our electricity is produced from natural gas, higher gas prices mean higher prices for consumers.
One of the main reasons for the expensive gas prices is the disadvantageous contracts the Thai government has signed with foreign petroleum companies. Eighty percent of the gas purchased from foreign companies is burned for power production, so these contracts have a significant impact on consumer prices.
The Yadana gas project uses natural gas from the Andaman Sea off Burma which is shipped to a Thai power plant via a 500-km pipeline.
Repeated delays have put the project almost two years behind schedule, and Thai consumers are paying for gas they are still not using. The government negotiated a take or pay contract, and Thai consumers are bearing the cost through unnecessarily high utility prices.
This is one of the many examples of government mismanagement and putting the country at a long-term disadvantage that jeopardises national interests. The nature of the purchase contract means that constant payments have to be made regardless of the amount of gas taken or the needs of buyers. Even though the Petroleum Authority (PTT), the main energy procurer, has not received any gas from Burma, it has to pay the amount agreed to in the contract in advance. Delivery should have begun more than one and a half years ago.
Prasert Bunsampun, president of PTT Gas, said the PTT has paid up to $55 million (two billion baht) to the Yadana consortium led by Total-Fina of France and Unocal of the United States. The power plant which will use the gas also is not completed, so the PTT is now thinking about seeking a review of the contract, according to Mr Prasert, which could save the Thai public as much as $990 million (37.5 billion baht) over the next decade.
The contract requires that the purchase ceiling price rise steadily based on estimates made during the economic boom years. Despite the adjustment in projected demand in 2005 from four billion cubic feet per day of gas to 2.68 billion cubic feet, the PTT is paying advances for nothing and this is hurting its financial position.
As a result of these advance payments and the recapitalisation of several PTT subsidiaries that have been hit hard financially, the spending deficit of all state enterprises including the PTT will increase.
In other words, the late delivery of gas from Yadana has worsened the financial situation of all state enterprises and has reduced their net profit. Thai consumers are bearing the brunt of this financial burden as people pay more for electricity.
The Electricity Generating Authority (Egat) uses a fuel adjustment factor to calculate the price of electricity. If gas prices rise, this factor rises, and so too do electricity rates. The burden has been passed on to the people, who should not take responsibility for the government's poor decision making.
The contract signed by the PTT and the Yadana consortium forces us to buy gas at a fixed incremental rate for 30 years. It does not matter whether our demand for gas rises or falls. We have to purchase the gas or pay advances for gas we do not use. Even though we have found other cheaper fuels, we cannot make use of them as we must abide by this long-term fixed contract.
The long-term contract puts us at financial risk due to foreign exchange fluctuations. Fluctuations have already occurred and the exchange rate of the baht has gone from 25 to one US dollar to almost 40 baht in just over two years.
Recently, Suwat Liptapallop, the industry minister, said the government had to pay $75 billion for gas that we are unable to use as a result of the poor contracts surrounding the Yadana and Yetagun fields (the other gas source from Burma) and seven other sources in the Gulf of Thailand. He ordered the revision of all the contracts, an attempt that may be opposed by the various consortiums.
Conservation groups have proposed a number of times that the economic crisis could be cited as force majeure to delay construction. This was rejected by the PTT and the government. They claim there can be no flexibility and the country badly needs energy. Both claims have been proven specious.
First, late in 1999, the PTT successfully negotiated a reduction in the advance payment to the Yadana consortium. Secondly, the country now faces a power glut. The reserve margin of electricity is now more than 50% of the actual need despite the fact that several generators have halved output.
Ironically, Mr Suwat is bragging about his idea to revise the contracts just as the conservation groups have been suggesting for some time.
The construction of the Yadana pipeline has greatly affected local villagers as well. Their property has been damaged by the use of explosives, and the market value has declined because no one wants to live near the pipeline, which may cause fatal accidents at any time as well as damage their farms.
The PTT also has not followed the recommendation of the Committee to Review the Yadana Conflict appointed by the prime minister. The committee said the PTT should provide proper compensation to affected villagers immediately, but the PTT has ignored the locals and has not paid fair compensation.
But it appears the PTT cares very little about its mistakes and the impact on the national interest. As the sole supplier of oil and gas, it enjoys all the profits and passes any burden on to ordinary people.
MONITORING THE JOINT DEVELOPMENT AREA IN THAILAND
OilWatch Resistance Bulletin 4, June 2000
The JDA Pipeline Monitor project was set up in late 1998 by a group of environmental and social NGOs who have common concerns for the natural gas investment project in southern Thailand. With lessons learnt from the Yadana gas pipeline, the NGO group came together to find possible strategies to prevent the environmental destruction and social injustices possibly caused by such large-scale energy project. The group finally came to a resolution to form a loose campaigning network under the name of the JDA Pipeline Monitor.
To support the above strategic approaches, the JDA Pipeline Monitor started. The coalition has found that information and education of local people is essential. The Songkhla townspeople and the village communities living around the selected site of the gas separation plant and the gas pipeline route, need to know more about the project and encouraged to taking part in the public participatory process for its policy decision.
When the leaders of the Thai and Malaysian governments signed the JDA agreement in April 1998, there was a small protest of the local students in Songkhla province. The representatives of the local NGOs also took immediate actions. They demanded to the authority for opening more JDA related information and contract made between the two governments. In the meantime, majority of the townspeople in Songkhla, especially those fishery communities who will be most affected by the project, knew very little or nothing about it.
As part of our activities, we organised a five days studying tour to Kanchanaburi. Forty people came from ten Muslim fishery communities in Chana and Sakom districts. Chana is the selected site of the GSP while parts of Sakom district will be the gas pipeline route. A few Songkhla townspeople also joined the trip. We spent 5 days between travelling from Songkhla in the South to Kanchanaburi in the west, Bangkok in the Central, and finally to Chonburi and Rayong in the East, totally over thousand kilometers.
The first day, we visit the Charakepluak village, Kanchanaburi. Kanchanaburi is a western province, close to the Burmese border. It is around 964 km. away from Songkhla. The Yadana gas pipeline route's construction has caused severe deforestation, soil erosion, and impacts on the variety of wildlife and plants in the pristine forests of the province. Lots of local communities, particularly the Charakepluak village, have been badly affected by the construction. They had learnt painful lessons with PTT's big liar, irregularities and unfair treatment to them during the project operation.
The visiting group spent all morning sight-seeing around and exchange information and opinion with the community. In the afternoon, a speakers from the Kanchanaburi Conservation Club, Charakepluak people and Foundation for Children contributed lots of very good campaigning examples, ideas, tactics and strategies in the forum. The whole day of intense exchanging among the groups had turned our friends from the south from lively-and-smiling looks to serious-and-strained ones. Many questions, like how to oppose and fight with this kind of project, had been actively raised and discussed with their western friends.
Then we visit Laemchabang village in Chonburi and sight-seeing around outside the Map Ta Phud Industrial Estate and Thai Petrochemical Industry plants as well as some coastal communities in Rayong. Exchange among the local people were arranged in both places.
The Laemchabang village possesses a beautiful coastal landscape. The community, over 100 year old, has disobeyed the 1978 State Decree to expropriate their land to industrialization under the Eastern Seaboard project. Around 200 local households, left to date, have still been fighting against such centralized policies and the authorities' unjust practices. Their long and tough experiences to those officials' and capitalists' hostility and tricks to undermine people force and unity are very good examples to the visiting friends.
In the afternoon, the visiting group traveled eastward to Rayong, 179 km. from Bangkok. Besides Chonburi, Rayong is another strategic province of the Eastern Seaboard project. It has been directed to be the most important heavy industrial zone of the country. After discovering the natural gas field in the Gulf of Thailand in 1970, the Map Ta Phud Industrial Estate was proposed to be built here in response to the natural gas development and the other related investment like plastic, petrochemical and chemical industries. The TPI group, a giant private company, also emerged later for the similar investment projects.
Both MTP and TPI have occupied large parts of the riches coastal resources and most beautiful seashores in the East. Since the establishment of these industrial complex over 10 years ago, many old fishery communities were expelled from their land. A few remaining communities have to survive harder with their small fishing boats and less fertility coast in today.
In Rayong, the Songkhla people saw with their own eyes, like how large the industrial complex is, how the polluted beaches and air are, what extent the seashores have been eroded by the land reclamation, and last but not least, what effects the eastern fishery folks have got from the petrochemical empire located to their next door. They had chance to touch foul smell by themselves and learn direct experience how bad the pollution at Map Ta Phud that all TV news have, long and often, talked to. They felt deep compassion to their eastern folks who are living desperately under those badly polluted sea and air.
The third day, we visit the Industrial Estate Authority of Thailand, Map Ta Phud Branch Office, and other industrial plants within the MTP area. These included the National Petrochemical Company, Gas Separation Plant of PTT, and Rayong Oil Refinery Plant. In late afternoon, the group took a visit to the local compulsory school located close to the industrial estate.
The audience spent approximately one and a half hour at each office attending the audio-visual presentations and technological demonstrations about natural gas industry and related industries. The visits here helped much envisioning the southern visitors to get better knowledge and understanding to what they will encounter in future, in particular, when the JDA project can proceed as planned. They later found their own answers to the much concerned points, like what and how the natural gas and other industrial investment related. Some visitors who trended to believe the PTT's sayings about no environmental harm of GSP, started to questioning about it, then.
In late afternoon, there was a meeting among the Map Ta Phud Phanpitayakarn School's teachers, MTP community representatives and the visiting group. The MTPP school is the most affected from the air and noise pollution of MTP. During 1997-98 when the situation became worst, over thousand students, teachers and local people fell seriously ill by the foul smell released from the estate. Many of them have developed chronic respiratory system diseases and allergy. The detection of toxic chemical residues also found in the patients' blood and urine. The school finally had to be temporary close for several months. Many other stories of people suffering from the industrial activities and their uncontrolled expansion were told, and inevitably added to the visitors' growing concern.
THAILAND’S ENVIRONMENTAL AND HUMAN RIGHTS GROUPS REJECT THAI-MALAYSIA GAS PIPELINE
OilWatch Resistance Bulletin 11, December 2000
Thailand’s environmental groups reject bogus ‘public hearing’ on Thai-Malaysia Gas Pipeline Project as rigged; tensions worsen with shooting of project opponents by unknown gunmen.
A broad coalition of Bangkok-based environmental, human rights and social development groups as well as academics rejected the public hearing on the Thai-Malaysia Gas Pipeline Project held in Hat Yai earlier this morning. The hearing lasted less than an hour and concluded that gas pipeline project could go ahead as planned.
Meanwhile, tensions heightened as unknown gunmen shot at village people opposing the project as they were dispersing to return home after the hearing. The shootings have prompted the village people to resume their protests in front of the field office of the Petroleum Authority of Thailand (PTT) in Chana district, where the gunmen fled in hide there.
Earlier this morning, police barricades and barbed wire fences kept nearly 5,000 village people opposing the project from entering the indoor gymnasium where the public hearing was held. However, a group of students and village people managed to block the four entrances of the gymnasium, preventing the members of the public hearing committee from entering the venue. Subsequently, a number of students and village people were injured when nearly thousand of police used force to clear the entrance and enable committee members to begin the public hearing proceedings.
The public hearing participants comprised members of the Public Hearing Committee, National Economic and Social Development Board (NESDB), PTT, Electricity Generating Authority of Thailand (EGAT), Trans Thai Malaysia Gas Company, Office of Environmental Policy and Planning (OEPP), officials and academics, and ‘village supporters’ of the project most of whom were paid 500-1,000 baht to attend the hearing. It was said that there were approximately 300 people inside while many journalists were impossible to enter into the venue.
According to the schedule, government agencies such as the NESDB and PTT would present reports relating to economic benefits, environmental impacts, and health and safety issues. No specific details are available about what went on at the hearing. But it is known that the chair of the public hearing Gen, Charan Kullavanijaya asked for a show of hands from those opposing the project. When there were none, he concluded the hearing and emerged to announce that the hearing was ‘successful’ and a report would be submitted to the Cabinet within 15 days for consideration. The Industrial Minister would be proposed the hearing report to the Cabinet on 24th October, the Interior Minister said to the INN news radio yesterday.
After the hearing was closed down, one of the village leaders from Chana district in Songkhla province forum stated that this rigged public hearing has made a mockery of the public. ‘If future public hearings are also staged like this, it is not possible for democratic debate about the impacts of the project,’ he said. The village people have vowed to gather soon in larger numbers to halt the project. Earlier in end-July 2000, strong protests by village people forced the abandonment of the first public hearing on the project held in Songkhla province.
Dr Srisak Valipodom, a retired well-known academic from Silpakorn University stated that the conflict over the project is bound to continue as long as the politicians and government officials dismiss the concerns voiced by local people to be affected by the project. He warned that: ‘In the past, the local people have always been asked to sacrifice for the so-called benefit of the country. It is time that the country’s leaders listened to the views of local people also. The unethical practices of the governing body will stimulate people to kill each other.’
Dr. Rachinee Boonsophon, an independent academic in Songkhla stated that ‘The recent public hearing process is dishonest and not transparent. It violates all ethics and democratic principles and therefore cannot be accepted.’
Ms. Watcharee Paoluangthong, working on energy issues in Bangkok, said that the public hearings in Thailand are mainly intended to justify decisions already made on large projects.
‘Public hearings are not intended by the government to provide information or to have debate about whether the project should go ahead. The hearings are organised merely for the government to pass the official requirements such as consultation with local people affected by the project.
‘In the case of the Prachuab Khiri Khan energy project, the public hearings were held so that the government could fulfil the conditions for obtaining loans from the Japan Bank for International Co-operation (JBIC). It is obvious that the government is rushing through the hearings on the gas project for the same purpose,’ she said.
Environmental and human rights groups view the recent attempt to hold a public hearing as not legitimate in terms of law and democracy. The groups reject the result of the public hearing as declared by its chairperson Gen Charan that the public hearing process is concluded. The groups demand that the government review the public hearing process which have to halt the involvement of all benefit groups from the gas project from being involved in the hearing process. A neutral and independent committee comprising Thai academics endorsed by all parties concerned should be appointed to arrange the genuine and transparent public hearing.
The groups call on all those concerned with democratic debate and the impacts from the gas pipeline project to write letters of protest to the Thai government as the following:
The Prime Minister Fax: (662)- 280-0858
FOR MORE INFORMATION
Campaign for Alternative Industry Network / CAIN THAILAND
Villagers Vow to Fight Thai-Malaysian Pipeline
By Sasithorn Simaporn, Reuters News Service
BANGKOK, 20 May 2002 - A long-overdue Thai-Malaysian gas pipeline project is set to be hit by fresh environmental protests despite an attempt by the Thai government to soothe opposition by rerouting it. Environmentalists and residents of fishing communities in the southern town of Chana, on the route of the 366-km (230-mile) pipeline, told Reuters last week they would block any attempt to construct the line.
‘Villagers are on round-the-clock security alert and we will not allow any outsiders to get within a two kilometre radius from our villages,’ said protest leader Suriya Sakkariya.
‘This project not only affects our community, but it hurts the entire country and we will continue to fight on.’
After a previous route was greeted with protests, the government of Prime Minister Thaksin Shinawatra announced last Friday the onshore part of the pipeline would be moved five km (3.13 miles) in order to avoid environmental objections.
The Petroleum Authority of Thailand (PTT) and Malaysia's Petronas are joint operators of the proposed gas pipeline project, worth 30 billion baht ($698.8 million).
The pipeline will be laid from the Thai-Malaysian Joint Development Area (JDA) natural gas project in the Gulf of Thailand to the southern Thai province of Songkhla, and then on to Kedah state in northern Malaysia.
Construction of the pipeline and a gas separation plant was due to begin early in 2001 but has been awaiting environmental approval and has been delayed by fierce opposition from environmentalists and villagers in Songkhla.
Prommin Lertsuridej, a personal secretary to Prime Minister Thaksin Shinawatra, told reporters last week opposition had subsided significantly after the government changed the route.
‘The government has told the PTT to work closely with villagers in the area to hear their opinions in order to avoid opposition to the scheme,’ Prommin said.
But villagers were unconvinced.
‘We know the government is sending a PR team to persuade villagers in the area to agree with the project, but we will not allow them to build the pipeline here,’ said Kittipop Suthisawang, a leader of another anti-pipeline group in Chana.
Kittipop said the town is a major breeder of Javanese turtledoves.
He said environmental experts warn the scheme could threaten the breeding cycle of 200,000 doves, jeopardizing a business worth a billion baht a year to the village.
Years of delays have prompted Malaysia to threaten to go it alone with the project.
Thai-Malaysian Gas Pipeline: Three-Day Rally Marks Renewed Demand for Dumping of Project
Assembly of the Poor. Thailand, Tuesday, September 03, 2002
Opponents of the Thai-Malaysian gas pipeline perform a protest dance on a beach in Songkhla yesterday, the first day of their three-day rally against the project.
Locals joined by Pak Moon dam protesters
Kultida Samabuddhi - Songkhla
Around 2,000 villagers affected by state projects yesterday launched a three-day demonstration at Lan Hoy Siab beach in Songkhla's Chana district to demand the Thai-Malaysia gas pipeline project be scrapped.
‘The government is destroying the livelihood of Chana villagers just as they have done to Pak Moon villagers,’ said Sompong Wiangchan, 50, an opponent of Pak Moon dam in Ubon Ratchathani province in the Northeast.
Mrs Sompong said the rally supported a five-year struggle against the pipeline project by Chana people. She conceded, however, that it might not change Prime Minister Thaksin Shinawatra's mind about the project, because Mr Thaksin had shown he had no regard for the public's opinion.
Mr Thaksin on May 10 approved the 41-billion-baht gas pipeline and gas separation plant, a joint venture between PTT Plc and Malaysia's Petronas, on a condition that the pipeline be moved 5 km from its original site.
The PM's approval came after the project's environmental impact assessment study had been rejected eight times.
Mrs Sompong warned opponents to avoid violence in their struggle. ‘The experience of Pak Moon dam villagers shows that violence is ineffective’, she said.
Prakob Lamsoh, 60, a Chana resident who lives near the proposed pipeline route, said villagers no longer trusted Mr Thaksin, whom they thought was biased in favor of the developers.
Opponents are worried about industrial pollution. They also said Thailand was at a disadvantage under the joint-venture contract with Malaysia.
Chana villagers said Mr Thaksin, on a visit to the site early this year, promised he would not go ahead with the project if it caused trouble to local people.
Mr Prakob said opponents declined to meet Mr Thaksin during his visit to Songkhla last Friday because there was no point.
A villager, who declined to be named, said some people supported the pipeline project, but preferred to keep a low profile for fear of being shunned by their neighbors. ‘Many villagers believe the project would create jobs’, he said.
The joint venture will exploit gas reserves in the so-called Joint Development Area (JDA) which lies in the Gulf of Thailand where Thailand and Malaysia meet. National oil companies from both countries have set up the Trans Thai-Malaysia Company to build a pipeline to bring the gas ashore in southern Thailand. The pipeline was originally due to go into operation this year.
Thai-Malaysian Gas Pipeline: Pipeline Protesters Fly the Red Flag
Sumet Panphet and Sirinart Sirisunthorn
THE NATION, Sep 3, 2002
The flags marketing the proposed site of the Thai-Malaysian gas pipeline in Songkhla were green during Prime Minister Thaksin Shinawatra's January visit. Yesterday the flags were still there, only this time they were red.
Local residents said this was a message to the premier signaling: ‘We will fight the pipeline with all our means.’
About 1,000 of the project's opponents yesterday kicked off a three-day gathering in Songkhla's Chana district. Traveling by bus, van and truck, they came from across the country, carrying supplies. Many of them face problems of unpopular government projects in their hometowns.
The atmosphere was friendly at Larn Hoi Siab Beach, where the gathering is being held and where the proposed pipeline will come ashore. Young villagers guarded the area and there was no police. No alcohol was allowed, leader Banchong Nasae said.
Famous singer Surachai Chanthimathorn, or Ngaa Caravan, showed his support for the gathering by throwing a concert on the beach after a forum organized by Songkhla academics.
The project's opponents also organized Southern-style fund raising activities called Liang Namchar (donate money and have tea). The opposition groups have scheduled a series of activities for the event, including a protest at the city hall and the Malaysian Consulate.
Meanwhile in Bangkok, academics, senators and the National Human Rights Commission agreed to work together to pressure the government to stop the project to prevent the possibility of violence.
The National Human Rights Commission will today organize a special meeting to seek a ruling from the Constitution Court on whether the government's decision to proceed with the pipeline project violated the Constitution.
‘We will submit it through the Parliament Inspector channel,’ commissioner Wasan Panich said.
Industry Minister Suriya Juengrungruangkit again this week insisted the government would not change its policy regarding the project.
Repression in Thailand
On December 20, 2002, environmental organizations and the population of Had Yai, who have been opposing the construction of the Thai-Malaysia gas pipeline and separation plant, were brutally repressed by the police.
The demonstrators joined together in a non-violent demonstration, during which they tried to deliver a letter with more than 2,000 signatures of people opposed to this project, and in which they demanded that the decision of the national authorities and of Petronas, the Malaysian company in charge of the project, be revised.
Gas (whom members of OilWatch Africa know from participation in the last Assembly in Cameroon,) together with 11 other activists, were arrested while the campesinos of the area were beaten and bitten by police dogs. The twelve activists will be tried. Right now the solidarity of members of the network is very important, and that members respond to the urgent pleas for help which we are circulating.
More information: Penchom ‘cain’ <email@example.com>
Update from Oilwatch Bulletin #36, February 2003
After the 20 December's crackdown on the pipeline opposition groups, there have been lots of things being done in rush both in Chana-Songkhla and in Bangkok. There have been many villagers got wounded while many community leaders being threatened with the police warrants issued after that by the state authority. However, thanks to the serious concern of all sides to the dictatorial act of the Priminister Taksin and his government, lots of concerned parties and public figures in Bangkok including senators, National Human Rights Commission's members and others all are moving on to probe the incident and put serious efforts to bring punishment to the state authorities who have been abused of their power in this incident. While a group of lawyers from the Law Society of Thailand and ENLAW, a NGO law group, have extended their assistance to the legal fight for all 12 NGO workers who were markedly arrested in that night. We all have been drawn into this move and helped facilitate all sides' actions to halt this pipeline project, at least to prevent more violence inevitably broken in near future if the government still keeps on its harsh decision to proceed it on. Many people now are fear of this project that could probably turn to badly bloodshed event. Since the opposition groups whose many of their relatives and loved ones were fiercely hit by the police on Dec. 20 want to take on revenge and vow 'never defeat' to the project even though they have to sacrifice their lives.
We much need now the international support to the opposition groups' demand to both Thai and Malay government to halt the project for the sake of human rights, non-violence, natural resources and local livelihood. If the protest against the gas pipeline project in Chana could delay the project construction for one more year, it is possible that the opposition would succeed to push it away from Chana. However, concerning to the whole picture of the ASEAN gas pipeline network and exploitation plan, the case of gas pipeline plan in Chana is only its very small part.
More information: Penchom and Pipob firstname.lastname@example.org
Malaysia is currently (2002) in its third year of economic growth following the deep recession caused by the Asian financial crisis of 1997-98. Following a 7.5% decline in real gross domestic product (GDP) in 1998, Malaysia experienced real GDP growth of 5.6% in 1999 and 7.5% in 2000. Softening demand for Malaysian exports associated with the economic slowdown in the United States, however, is expected to lower the country's real GDP growth to 5.6% in 2001.
Imports of capital goods have been rising, which may lower the country's current account surplus. Malaysia's banking system has been stabilized, after being undermined by a high proportion of nonperforming loans during the financial crisis.
Malaysia contains proven oil reserves of 3.9 billion barrels, down from 4.3 billion barrels in 1996. Despite this trend toward declining oil reserves (due to a lack of major new discoveries in recent years), Malaysia's crude oil production has been stable in recent years, with monthly production numbers fluctuating between 660,000 barrels per day (bbl/d) and 730,000 bbl/d between 1996 and early 2001. In 2000, crude oil production averaged 690,000 bbl/d. After a pause during the Asian financial crisis, Malaysia's domestic petroleum product consumption is growing again.
As a result of declining oil reserves, Petronas, the state oil and gas company, has embarked on an international exploration and production strategy. Currently, Petronas is invested in oil exploration and production projects in Syria, Turkmenistan, Iran, Pakistan, China, Vietnam, Burma, Algeria, Libya, Tunisia, Sudan, and Angola. Overseas operations now make up nearly one-third of Petronas revenue. In 2000, Malaysia exported the majority of its oil to markets in Japan, Thailand, South Korea, and Singapore.
Malaysia's domestic oil production occurs offshore and primarily near Peninsular Malaysia. Most of the country's oil fields contain low sulfur, high quality crude, with gravities in the 35o-50o API range. Over half of the country's oil production comes from the Tapis field, which contains 44o API oil with a low sulfur content. Esso Production Malaysia Inc. (EPMI), an affiliate of ExxonMobil Corporation, is the largest crude oil producer in Peninsular Malaysia, accounting for nearly half of Malaysia's crude oil production. EPMI operates seven fields near the peninsula, and one-third of its production comes from the Seligi field. The Seligi-F platform, with its 28 wells, is the newest satellite in the Seligi field, located 165 miles off the coast of Terengganu, Peninsular Malaysia. Built at a cost of $155 million, Seligi-F is the seventh production platform on the Seligi field. The platform came on stream in March 1998 and is expected to produce an annual average of 21,000 bbl/d. EPMI holds a 78% interest in the project with Petronas Carigali holding the remaining 22%. In addition, EPMI began drilling the nearby Raya-A platform in the second quarter 1998. EPMI has invested $96 million in six wells, and holds an 80% interest with Petronas Carigali holding the remaining 20%.
In other developments, Sabah Shell Petroleum Company, a unit of Royal Dutch/Shell Group, raised production at the Kinabalu field to 36,000 bbl/d, as well as 28 million cubic feet per day (Mmcf/d) of gas. Production at Kinabalu, located in the SB-1 block 34 miles off the coast of Labuan, Sabah in east Malaysia, began in December 1997. Peak production is expected to reach 40,000 bbl/d of oil and 30 Mmcf/d of gas. As operator of the SB-1 block, Shell holds an 80% stake in the block, with Petronas holding a 20% stake. In February 1998, Amerada Hess signed two, five-year production sharing contracts (PSCs) with Petronas for blocks PM304 and SK306. The PSCs commit Amerada to $24.9 million of exploration activities on the two blocks. A successful well was reported in the PM 304 block in April 2001, but it is still under evaluation and a reserve estimate has not been announced. Under the PSCs, Amerada holds a 70% stake in PM304, offshore Terengganu, and an 80% stake in SK 306, offshore Sarawak, with Petronas holding the remaining interests in both blocks.
In February 2000, Sweden's Lundin Oil announced that it had signed a sales agreement with Petronas and PetroVietnam which will allow it to proceed with development of its long-delayed Bunga Kekwa project. Production stood at 18,000 bbl/d in April 2001, and is expected to increase to a volume of 40,000 bbl/d when development is completed in 2003. Lundin Oil is the operator of the field, and Petronas and Petrovietnam hold equity stakes in the project. Lundin Oil also was awarded the PM 305 block in November 2000. Lundin will have a 60% interest, with the remaining 40% held by Petronas.
Refining & Downstream
Malaysia has six refineries, with a total processing capacity of 513,600 bbl/d. The three largest are the 155,000 bbl/d Shell Port Dickson refinery and thePetronas Melaka-I and Melaka-II refineries, which each have a capacity of 95,000 bbl/d.
The second phase of the $1.4-billion, 200,000-bbl/d Melaka refinery complex, located about 90 miles south of Kuala Lumpur, commenced operation in August 1998. The 100,000-bbl/d Melaka-II second phase is a joint venture between Petronas (45%), Conoco (40%), and Statoil (15%). This second refinery contains a 62,000-bbl/d vacuum distillation unit, 26,000-bbl/d catalytic cracker, 28,500-bbl/d hydrocracker, 35,000-bbl/d desulfurization unit, and 21,000-bbl/d coker. One of the main purposes of this refinery is to supply gasoline to Conoco's service stations in Thailand and a new line of stations planned for Malaysia. The first phase of the Melaka refinery was finished in mid-1994 and consisted of a 100,000-bbl/d sweet crude distillation unit, which is wholly-owned by Petronas and processes Tapis crude oil.
Petronas, in a joint venture with Conoco began construction of a 7,500-bbl/d lubricants plant at Melaka in 1998. Petronas and its partners began construction on the $250-million plant in March 1998, and it is scheduled to come on line in 2002.
In other downstream activities, Petronas signed a joint venture agreement with Union Carbide Company, in April 1998, to build a petrochemical complex in Kertih on the east coast of Peninsular Malaysia. Construction of the complex is estimated to cost $3-$4 billion and to involve three separate projects. The centerpiece of the joint venture is an olefins cracker unit with an annual production capacity of 600,000 metric tons of ethylene and 85,000 metric tons of propylene. Petronas will hold a 76% stake and Union Carbide will hold a 24% stake in this unit, which is expected to be complete by the first quarter 2001. Both companies will hold equal shares in the ethylene oxide/ethylene glycol plant with an annual capacity of 320,000 metric tons and the multi-unit derivatives plant. The derivatives plant will produce amines and ethyloxates, glycol ethers, butyl acetate, and butanol.
Malaysia contains 81.7 trillion cubic feet (Tcf) of proven natural gas reserves. Natural gas production has been rising steadily in recent years, reaching 1.45 Tcf in 1999, up from 1.37 Tcf in 1998. Natural gas consumption in 1999 was estimated at 0.67 Tcf, with LNG exports of 0.73 Tcf (mostly to Japan, South Korea, and Taiwan). Exports dipped slightly in 1998 as a result of the Asian financial crisis, but began to climb again in 1999.
One of the most active areas in Malaysia for gas exploration and development is the Malaysia-Thailand Joint Development Area (JDA), located in the lower part of the Gulf of Thailand and governed by the Malaysia-Thailand Joint Authority (MTJA). The MTJA was established by the two governments for joint exploration of the once-disputed JDA. The JDA covers blocks A-18 and B-17 to C-19. A 50:50 partnership between Petronas and Triton Energy Ltd. is developing block A-18, while the Petroleum Authority of Thailand (PTT) and Petronas also share equal interests in the remaining blocks. PTT and Petronas announced an agreement in November 1999 to proceed with development of a gas pipeline from the JDA to a processing plant in Songkla, Thailand, and a pipeline linking the Thai and Malaysian gas grids. Malaysia and Thailand will each take half of the gas produced. The agreement was delayed by uncertainty over demand growth due to the Asian financial crisis. Now that the issue of adequate demand has been resolved, a new problem has arisen.
Many local residents in the Songkla area are opposed to the project, and have been trying to get the government of Thailand to alter the pipeline route and the location of the processing plant. The issue is still under discussion, and no final decision has been made. One possibility would be to have a pipeline run directly to Malaysia.
Block A-18 is operated by the Carigali-Triton Operating Company (CTOC), a joint venture project between Triton and Petronas. In December 1997, the MTJA approved a development plan for CTOC's Cakerawala gas field, which will be the first JDA field to come on line. In November 1999, CTOC signed a gas sale agreement with Petronas and PTT, which will allow it to proceed with development. Gas production of 390 Mmcf/d will begin in mid-2002.
Malaysia accounted for approximately 17% of total world LNG exports in 1999. After a brief downturn related to the Asian financial crisis, demand for LNG is rising again. After much delay, Malaysia is proceeding with a long-planned expansion of its Bintulu LNG complex in Sarawak. In February 2000, Petronas signed a contract with a consortium headed by Kellogg Brown and Root for construction of the MLNG Tiga facility, with two LNG liquefaction trains and a total capacity of 7.6 million metric tons (370 Bcf) per year. The Bintulu facility as a whole will then be the largest LNG liquefaction center in the world, with a total capacity of 23 million metric tons per year (1.1 Tcf).
Financing for the MLNG Tiga facility was completed in April 2001, and it is expected to begin operation in 2003.
Letters of intent have been signed for output from the MLNG Tiga plant with several Japanese utilities. Though Malaysia is not a major supplier of LNG to the United States, occasional spot cargoes have been contracted by American buyers.
In addition to LNG, Malaysia exports 150 million cubic feet per day (Mmcf/d) to Singapore via pipeline. Surprisingly, Malaysia may also become an importer of gas from Indonesia. Petronas signed an agreement in April 2001 with Indonesia state oil and gas company Pertamina for the import of gas from Conoco's West Natuna offshore field in Indonesian waters. The move is being seen as part of a Malaysian strategy to become a hub for Southeast Asian natural gas integration. Deliveries are scheduled to begin once pipeline construction is complete in August 2002. The pipeline will connect to an existing pipeline from the shore to Malaysia's offshore Duyong field, which will help minimize construction costs.
Malaysia currently has approximately 14 gigawatts (GW) of electric generation capacity, of which 84% is thermal and 16% is hydroelectric. In 1999, Malaysia generated around 59 billion kilowatthours of electricity. The Malaysian government expects electricity demand to rise more than 8% per year between 2001 and 2005.
A contract was signed in December 2000 between a local Malaysian independent power producer (IPP), GB3, and Alstom for an additional 650-MW generation unit to be built at the site of the Lumut Power Plant.Ê Siemens received contracts in December 2000 for two 710-MW power plants, one at Teluk Gong for the IPP Powertek, and one in Sepang for Malaysian Resources Corporation.
In 1994, the government granted approval for the massive 2.4-GW Bakun hydroelectric project in Sarawak. Scheduled for completion in 2002, the Bakun Dam had been slated to send 70% of its generated power from Sarawak to Kuala Lumpur through the construction of 415 miles of overhead lines in eastern Malaysia, 400 miles of submarine cables, and 285 miles of distribution infrastructure in Peninsular Malaysia. In addition, expansion plans included a high voltage line south to Johor Baharu and north to Perlis, near the western Thai border. A local company, Ekran, was awarded a turnkey contract to manage the project in January 1995. In 1996, the construction contract went to Sweden's Asea Brown Boveri (ABB). However, in early September 1997, the Malaysian government announced that it was delaying the project indefinitely, citing an unexpected rise in the dam's cost due to the country's economic difficulties.
In mid-1999, work resumed on the river diversion tunnels, a major component of the project, which will be completed by the end of 2000. The Malaysian government has taken control of the project and negotiated financia settlements with the firms involved. The subsea transmission line concept has been abandoned, and the Malaysian government is exploring the possibility of sales of electricity to Brunei and Indonesia. While it had appeared likely that the project would be scaled back from its 2,400-MW capacity, the Malaysian government announced in February 2001 that it had decided to complete the project on its original scale.
Malaysia is considering reforms to its power sector to make it more competitive and lower costs. Currently, three state-owned utilities dominate power generation and distribution in Malaysia. The market was opened to independent power producers (IPPs) in 1994, and 15 IPPs were licensed.
In recent developments, Tenaga Nasional Bhd, the main state-owned utility, began in 1999 to divest some of its power generation units. Eventually, Malaysia expects to achieve a fully competitive power market, with generation, transmission, and distribution decoupled, but reform is still at an early stage and the exact process of the transition to a competitive market has not been decided. The issue is still under study, and many observers have voiced caution in light of the experiences of other deregulated utility systems.
Sources: Asiaweek; Bernama News Agency; Dow Jones Newswire service; Economist Intelligence Unit ViewsWire; Oil and Gas Journal; Petroleum Economist; Petroleum Intelligence Weekly; New Straits Times; Project Finance; U.S. Energy Information Administration; WEFA Asia Economic Outlook; World Gas Intelligence.
Thailand's economy has resumed strong growth after two years of contraction following the collapse of the Thai baht in 1997. The country's real gross domestic product (GDP) grew 4.6% in 2000, and is projected to grow 4.3% in 2001. Long-term annual growth rates beyond 2002 are projected in the range of 6.0%. Still, the risks confronting Thailand's economic recovery are serious. The Thai economy is burdened by a relatively weak banking sector with a high proportion of non-performing loans. Delays in the restructuring of corporate debt also have been worrisome enough to prompt warnings from the International Monetary Fund (IMF) and international credit rating analysts. Any worldwide economic downturn could affect Thailand rapidly due to these structural weaknesses.
Thailand's energy sector is undergoing a period of restructuring and privatization. The Thai electric utility and petroleum industries, which have historically been state-controlled monopolies, are currently being restructured.
Thailand contains 351 million barrels of proven oil reserves. In 2000, Thailand produced about 171,000 barrels per day (bbl/d) of oil, an increase of about 25,000 bbl/d from the previous year. Of that production, about 110,000 bbl/d was crude oil. Most of the remainder was natural gas liquids (NGLs). Consumption fell from 741,000 bbl/d in 1997 to 706,000 bbl/d in 1998, as a result of the country's economic crisis. Since then, is has rebounded to an estimated 759,000 bbl/d in 2000. More than 75% of Thailand's total petroleum demand is imported.
The oil industry in Thailand is dominated by the state-owned Petroleum Authority of Thailand (PTT). PTT Exploration and Production (PTTEP) is the main upstream subsidiary of PTT. Thai Oil, the country's largest refiner, is also controlled by PTT.
The Thai government currently is planning to split up and privatize the holdings of PTT, as part of the package of economic reforms agreed with the International Monetary Fund (IMF) in 1998. The privatization is scheduled to take place in late 2001. Thai Oil also recently concluded a major restructuring of its debt to keep it in operation, after the decline in petroleum products demand and exchange rate deterioration severely reduced the firm's cash flow.
Despite the industry's financial problems, there have been a number of significant recent oil discoveries, most notably offshore in the Gulf of Thailand. Chevron is investing heavily in developing in Block B8/32 in the Gulf of Thailand. Unocal also is investing in offshore oilfield development, and reported a significant new find in October 2000. PTTEP has stakes in these projects.
Thailand has five oil refineries, with a combined capacity of 681,750 bbl/d. The three main refineries are Shell Co. of Thailand Ltd. (275,000 bbl/d) located in in Rayong, Thai Oil Co. Ltd., in Sriracha (185,000 bbl/d), and Esso Standard Thailand Ltd. (160,000 bbl/d), also located in Sriracha.
In response to low refining margins, Thai refiners have been trying to reduce operating costs. In late 1997, the Thai government allowed refiners to reduce required petroleum stocks to help ease liquidity problems, save foreign exchange, and reduce storage costs. The move was reversed in late 2000, however, and the Thai government intends to eventually require a reserve equal to about two months of consumption.
Thailand also plans to reduce its consumption of petroleum and imports of gasoline additive methyl tertiary butyl ether (MTBE) in the future by promoting ethanol. Thailand and Brazil signed an agreement in November 2000 for cooperation in the field of ethanol production. The Thai government approved a package of tax incentives in December 2000 to encourage more production of ethanol for fuel use.
Thailand contains about 11.8 trillion cubic feet (Tcf) of proven natural gas reserves, of which it produced (and consumed) 625 billion cubic feet (Bcf) in 1999. Much of the country's natural gas is used for generating electricity. Bongkot is Thailand's largest gas field, located 400 miles south of Bangkok in the Gulf of Thailand. Thailand also began imports of gas from Burma in 2000.
Thailand has introduced a new national energy policy urging consumers to use natural gas. On January 23, 1999, the Cabinet approved a proposal to encourage the use of natural gas over other fuels for power generation. Independent power producers planning coal or oil-fired power plants are being encouraged to switch their designs to natural gas fuelled power plants. PTT also plans to build an extensive gas distribution network around Bangkok, which will provide fuel for power plants as well as large industrial consumers.
Thailand's economic difficulties in 1997-1998 also forced the country to re-examine two gas deals signed with Oman and Indonesia. In 1996, the Thai government signed a memorandum of understanding (MoU) to purchase 1 million tons per year (Mmt/y) of Omani liquefied natural gas (LNG) beginning in 2001, rising to 1.7 Mmt/y in 2003 and 2.2 Mmt/y in 2004. However, Thailand announced in November 1997 a delay in the start of the deal to 2007. In May 1997, PTT signed a MoU with Indonesia's Pertamina for PTT to purchase natural gas from Indonesia's Natuna gas field at an initial rate of 500 Mmcf/d starting in 2003 and increasing to 1 Bcf/d beginning in 2007. The deal also had provisions for a 1,000-mile subsea pipeline to transport the gas from Natuna to Thailand via Malaysian waters. In addition PTT was to acquire a 12%-15% stake in the Natuna development project. In November 1997, Pertamina and PTT reached an agreement to delay the start of the deal from 2003 to 2007.
Unocal Thailand is the country's largest gas producer, and continued to increase its production with the development of new reserves in 1999. The Pailin gas field, which came onstream in August 1999, added 165 million cubic feet per day (Mmcf/d) to Thailand's gas production. Unocal also started production at the Trat field in 1999. Unocal is currently developing the North Pailin field, which will come onstream at 165 Mmcf/d in 2002.
In December 1999, Chevron announced new gas discoveries in its offshore Block B8/32. Development is proceeding, and the company has put its estimated gas reserves in the block at 2.5 Tcf.
The $1-billion, 416-mile Thai-Burmese natural gas pipeline, running from Burma's Yadana gas field in the Andaman Sea to an Electricity Generating Authority of Thailand (EGAT) power plant in Ratchaburi province, was completed in mid-1999. The line was scheduled for completion in April 1998 in time to begin delivering 525 Mmcf/d of gas to the plant on July 1, 1998. The project was delayed 18 months due to construction problems and legal challenges from environmental groups, and EGAT was forced to make a $50-million payment to the gas producing consortium for the delay under its take-or-pay contract. A new connecting line also has been built linking Ratchaburi to the Bangkok area, which will allow for other uses for imported Burmese gas in addition to the Ratchaburi power plant.
JOINT DEVELOPMENT AREA
One of Thailand's most active areas of gas exploration is the Malaysian-Thailand Joint Development Area (JDA) located in the lower part of the Gulf of Thailand, and governed by the Malaysia-Thailand Joint Authority (MTJA). The JDA covers blocks A-18 and B-17 to C-19. A 50:50 partnership between Petronas Carigali and Triton Energy Ltd. is developing block A-18 while PTTEP and Petronas Carigali also share equal interests in the remaining blocks. A gas sales agreement was signed in November 1999 for sales of gas from the block to PTT and Petronas, for use in both Thailand and Burma. The first production will take place in 2002, and is to come ashore via a pipeline terminating at Songkhla in Thailand. The JDA contains estimated reserves of 10 Tcf.
PTT has agreed to purchase 390 Mmcf/d of gas over the next 10 years from the Cakerawala field, the first JDA field to come on stream. Cakerawala contains estimated reserves of 2 Tcf. The final contract for development of the field was signed in March 2000.
As the project has moved forward, however, it has become controversial in Thailand. The pipeline is to come ashore in Songkla province in Thailand with a connection overland to Malaysia. Strong opposition to the project developed in 2000 among residents of Songkla, who say they were not consulted about the environmental impact of the project. PTT has warned that moving the project southward would increase its costs. PTT hopes to resolve the issue within the next few months and move forward with construction, with the pipeline operational in late 2002.
Thailand had 17,508 megawatts (MW) of electric generation capacity as of 1999, and generated approximately 89 billion kilowatt-hours (Bkwh) of electricity. The decline of the Thai economy as a result of the Asian financial crisis resulted in a decline in domestic demand for electricity of about 3 Bkwh in 1998, before rebounding in 1999. This situation compelled EGAT, the state-owned electricity company, to revise its electricity demand projections. EGAT postponed or delayed a number of projects including: delaying the commissioning of the third and fourth 300-MW thermal units of the Ratchaburi power complex by three years to 2004 and 2005, respectively; postponing the start-up of the second 300-MW thermal unit at the Krabi power plant from 2001 to 2005; reducing power purchases from small power producers (SPPs) from 3,200 MW to 2,000 MW for the period 1997-2003; delaying the next solicitation for power purchases from independent power producers (IPPs) from 1998 to 1999 and reducing these purchases from 4,000 MW to 2,300 MW; and delaying power purchases from three Laotian projects - the lignite-fired Hongsa project and the Nam Ngum 1-2 hydro projects to 2004 and 2005, respectively. While demand growth has recovered in step with Thailand's economic recovery, EGAT plans to lower its generating capacity reserve from 25% to 15%, which will diminish their immediate need for added generating capacity.
The Ratchaburi power plant, Thailand's largest power project, has moved forward despite the slowdown in power demand growth. The complex eventually will have a capacity of 3,200 MW, including 1,800 MW in six combined cycle gas-fired generators and 1,400 MW in two conventional thermal units which can burn either natural gas or fuel oil, but are slated to use gas imported from Burma. The first combined-cycle unit began operation in January 2000, and the current capacity of the plant is 1,470 MW. Ownership of the plant was transferred from EGAT to Ratchaburi Electric Generation in October 2000, and a successful initial public offering of stock was carried out, only the second IPO on the Thai market since the crisis of 1997-98.
One other IPP also recently began operation in August 2000, Tri Energy, which has a 700-MW plant at Ratchaburi. The company owned by a consortium including Edison Mission Energy, Texaco, and local Thai firms.
Proven Oil Reserves (1/1/01): 351.6 million barrels Oil Production (2000E): 171,000 barrels per day (bbl/d), of which 110,000 bbl/d is crude oil Oil Consumption (2000E): 759,000 bbl/d Net Oil Imports (2000E): 588,000 bbl/d Crude Oil Refining Capacity (1/1/01): 681,750 bbl/d Natural Gas Reserves (1/1/01): 11.8 trillion cubic feet Natural Gas Consumption/Production (1999E): 625 (bcf) Recoverable Coal Reserves (12/31/96): 2.2 billion short tons Coal Production (1999E): 20.1 million short tons Coal Consumption (1999E): 22.2 million short tons Electric Generation Capacity (1/1/99E): 17.5 gigawatts Electricity Generation (1999E): 89.4 billion kilowatthours
Major Foreign Oil Company Involvement: Chevron; Shell; Texaco; Total; Unocal
State Energy Companies: PTT is the state oil company. Electricity Generating Authority of Thailand (EGAT), Thailand's state electric power authority, has spun off Electricity Generating PCL (EGCOMP), but still owns a 41% share. EGAT also has sold off the Electricity Generating Public Co. Ltd. of Thailand (EGCO). Ratchaburi Electric Generating Company is an IPP.
Thailand has two other state-owned electric companies: the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA).
Major Refineries (Crude oil refining capacity - bbl/d): Shell Company of Thailand (275,000); Thai Oil Co. Ltd (185,000); Esso Standard Thailand Ltd. (160,000); Petroleum Authority of Thailand (61,750) Major Ports: Bangkok; Laem Chabang; Pattani; Phuket; Sattahip; Si Racha; Songkhia.
Trans-ASEAN Gas Pipeline (TAGP)
Background Information from OilWatch Resistance Bulletin 30, July 2002
There had been significant increase in the number of gas pipelines in the ASEAN with total built pipelines of about 5,565 km. while some 7,000 km of pipeline length are in the planning stages. ASEAN´s domestic consumption of natural gas reached 42 million tons of oil equivalent, 71% of which was used for power generation.
The ASEAN heads of state adopted ASEAN Vision 2020 at the 2nd ASEAN Informal summit held in Kuala Lumpur on December 15, 1997. The statement called for cooperation to ‘establish interconnecting arrangements for electricity and natural gas within ASEAN through the ASEAN Power Grid and a Trans-ASEAN Gas Pipeline’ (TAGP). In 1998, the Hanoi Plan of Action agreed on the establishment of a policy framework by 2004 to implement a Trans-ASEAN Energy Network comprising the ASEAN Power Grid and the TAGP projects. In 1999, the 17th ASEAN Energy Ministers Meeting approved the TAGP Plan of Action, which was also incorporated into the ‘ASEAN Plan of Action on Energy Cooperation (1999-2004).’
The ASEAN Council on Petroleum (ASCOPE) is developing an implementation plan, and has formed into four Export Working Groups to examine various aspects of the project. The groups will examine:
The 19th ASEAN Ministers of Energy Meeting agreed to develop a TAGP Memorandum of Understanding on July 5 in Brunei.
In the other hand, APEC, in partnership with the private-sector Pacific Economic Cooperation Council (PECC), completed a year-long ‘APEC Natural Gas Infrastructure Initiative’ which developed policy recommendations for regional energy ministers to accelerate investment in natural gas. APEC’s 18 energy ministers endorsed the initiative’s recommendations at their 3rd ministerial meeting in Okinawa, Japan on October 9-10, 1998. The APEC Business Advisory Council’s (ABAC) Partnership for Equitable Growth (PEG) further recommended that APEC build on the natural gas initiative with the ‘Asian Gas Grid’ (AGG) project. APEC’s AGG proposes the construction of an offshore, large-diameter pipeline connecting the existing and proposed gas networks (such as the TAGP) with major demand centres in China and Taiwan.
ASEAN’s first cross-border pipeline delivers 150 million standard cubic feet per day (scf/d) from Malaysia to Singapore. The Yadana (Burma)-Ratchaburi (Thailand) pipeline, completed in 1999, and the Yetagun (Burma)-Ratchaburi pipeline, completed in September 2000 followed the Malaysia-Singapore pipeline.
Indonesia signed or implemented three deals in 2001 to pipe natural gas across national borders: the January delivery of first gas from West Natuna to Singapore’s SembCorp Gas Pte Ltd.; the February signing of a gas sales agreement from South Sumatra gas fields to Singapore’s Gas Supply Pte Ltd.; and the March signing of a contract to deliver gas from West Natuna to Malaysian Petronas’ offshore Duyong facilities. On the horizon are projects to deliver gas to Malaysia and to Thailand from the Malaysia-Thailand Joint Development Area.
The TAGP will require cross-border connections require harmonisation of national legal and regulatory frameworks, as well gas pricing schedules. Common technical standards for design and construction, operation and maintenance, safety, etc. are also necessary.
The Indonesian Case
Gas Grid Plans: Indonesian state gas company Perusahaan Gas Negara (PGN) has developed a plan, the Integrated Transmission System (ITS), eventually to link the islands of Sumatra, Java, and Kalimantan via a 3,588-kilometer integrated gas pipeline. The four elements of the pipeline system (only one of which is partially complete) are:
Gas pipeline projects already identified or planned such as the following:
Sources: 2000, ASEAN Centre for Energy; U.S. Embassy Jakarta Home Page
PLAINTIFFS WIN ROUND IN YADANA LAWSUIT
March 6, 2001, From EarthRights International and International Labor Rights Fund
Yesterday, plaintiffs in two cases charging Unocal with slavery, unfair business practices and other violation of California Law defeated Unocal's attempt to remove their cases from California state court to federal court.
In September 2000, the state claims were filed by 15 citizens from Burma whose rights were violated by the construction of Unocal's natural gas pipeline project through the Tenasserim region in Burma, and California resident Louisa Benson.
Unocal then attempted to have the case removed from the state court. They argued that state standards, including violations of the California Constitution such as slavery and involuntary servitude, and California's law on unfair business practices, were not applicable in the two cases, Doe v. Unocal and Roe v. Unocal.
Dan Stormer of the Pasadena Law Firm Hadsell & Stormer, who appeared for the Doe plaintiffs, stated after the ruling, ‘Unocal's last ditch effort to prevent this case from going forward as failed. We will take this case to trial and we will win.’ Natacha Thys of the International Labor Rights Fund, who argued for the Roe plaintiffs, added, ‘In allowing these claims of slavery and unfair business practices to go forward, the judge allowed Unocal's practices to be put on trial to the full extent of the law.’
Plaintiffs are also represented by the Center for Constitutional Rights, EarthRights International, and a coalition of other civil and human rights lawyers throughout the U.S.
More information: email@example.com
Timor-Leste demonstrates solidarity with Burma over pipeline, October 14, 2005
Papua New Guinea sweetens tax regime
SOURCE: Asian Oil and Gas - Oil Online, December 4, 2000
In a move to attract more oil and gas companies and investment to Papua New Guinea, the government lowered corporate tax rates by 5 percent to 30 percent and will now allow oil companies to deduct 25 percent of exploration costs against total income. The government also lowered the dividend holding tax by 7 percent to 10 percent. The government is optimistic that the more attractive tax policies will help move forward the proposed natural gas pipeline from Papua New Guinea to Australia as well as ----other exploration and production projects.
The gas and petroleum sector in Cambodia has been relatively inactive in recent years. There have not been any new licenses auctioned, nor has there been any drilling. Although production contracts have not been signed, the Woodside Petroleum company is carrying out geological and geophysical studies in blocks 1,2,3,4 and 7 in the Gulf of Thailand.
Border disputes between Cambodia and Thailand continue in a region where there are believed to be hydrocarbon reserves, especially gas, however, given that in both countries there is overproduction of gas, at the moment there isn´t any incentive to resolve this border conflict.
On the other hand, Harrods Energy is negotiating with the Cambodian government to explore the Tonle Sap block, one of the possibly important blocks of the country. It is said that seismic studies will begin in two large, deep, subterranean structures that may contain important gas and petroleum reserves.
Woodside Petroleum Ltd. is an Australian company dedicated to petroleum discovery and production. The company has interests in Australia and Papau New Guinea as well.
The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)